Zeroing in on Sales Incentives

The new iPlus sales reporting system will give Marketing the data it needs to create incentive programs that'll help move the metal

August 28, 2018

Capturing the Moment -- Our business hinges on the moment a customer buys one of our vehicles. The new iPlus reporting system will do a far better job of capturing the full impact of each of these transactions in near real time, thus generating the data Marketing needs to craft effective and efficient sales incentive programs.

It’s often said that nothing really happens in our business until we sell a vehicle. But for Tom Fournier, what happens next is almost as important.

Fournier heads a team on a mission to replace a dealer sales and incentive reporting system that’s more than 30 years old and no longer serves TMNA or its dealers well.

“These disaggregated systems don’t generate the information we need to make good decisions about what sales incentives to use and when,” says Fournier, a senior manager in Marketing. “It also slows the process to get dealers paid. A complete overhaul has been long overdue.”

Work on this state-of-the-art solution, called iPlus, began more than three years ago. It’s currently being tested at one Toyota dealership. If all continues to go well, Fournier said a more broad-based pilot program will kick off at the start of 2019. Full deployment to TMNA’s Toyota Regions and Lexus Areas would then follow in the new fiscal year.

When Sales and Finance Align

Fournier says the key breakthrough was finding a way to align the dealer’s reporting of a sale, referred to as a Retail Delivery Record (RDR), with its associated Toyota Financial Services (TFS) financing contract. Often, the latter is tied to a sales incentive, such as a special interest rate, a leasing offer or cash back. Currently, the sale and the financing are reported separately, potentially creating all kinds of headaches for the parties involved.

For example, a dealer might report the TFS contract as it happens but, for various reasons, hold off on submitting the RDR until the end of the week or even the end of the month. That can mislead team members responsible for creating and deploying incentive programs that aim to help Toyota hit its sales objectives each month.

“Sometimes we get to the middle of the month and it looks like we’re behind on our sales plan,” says Fournier. “Because we are trailing our sales plan, we might introduce some mid-month enhancements. Then, when all the sales reporting comes in at the end of the month, it turns out we were actually right on track. We didn’t really need to do anything and we unnecessarily spent extra incentive money. The new system will give us better and more timely information so we can make better decisions.”

Dealers and Customers Benefit, Too

The disconnect between the RDR and financing contract can also be problematic for dealers. For instance, with a cash-back incentive, TMNA typically pays dealers only 70 percent of the money due to them until the final numbers are verified and accounted for. That won’t be an issue with the new system, since all of the pertinent information will be interlinked and filed simultaneously

Also, iPlus’ will make it virtually impossible for dealers to apply a sales incentive incorrectly, such as zero percent interest on a 2018 Camry when it’s only available on 2017 models.

“Incentives can be very complicated and the old system allows dealers to easily make mistakes,” says Fournier. “There’s a process in place to resolve them. But it can take months to sort it all out. Some dealers have employees on staff whose full-time job is to chase down the money they are owed. iPlus will help prevent mistakes from happening in the first place and give our dealers a simple portal that will let them know what they have been paid and what they are still owed.”

Oh, and customers stand to gain, too. Rather than hold back their RDRs, dealers will be much more likely to report sales as they happen. That means their new-vehicle inventories, which customers can browse online via the dealerships’ websites, are much more likely to be up to date.

“In the long run, everyone is going to benefit from this new system,” says Fournier.

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